Financial Management

There are many elements that contribute to sustainable organizations. Strong financial management, combined with adequate resources, can go a long way toward achieving sustainability for your organization. To emphasize the importance of strong financial controls, the University requires officially recognized student organizations to submit a copy of their previous year’s financial report along with the proposed budget for the coming year as a part of annual re-registration in October.

Officer's’ Responsibilities: Checks and Balances

Your organization is responsible for its own finances and financial records. The University will provide guidance, if needed, but the responsibility rests with the leadership of the student organization. In order to maintain good financial control, it is necessary for more than one person to hold responsibility for financial transactions. The philosophy of checks and balances is an important one to maintain because the University of the South holds all officers responsible for any debts incurred on behalf of the organization if the organization does not have sufficient funds to pay for an expense.

Planning for the Fiscal Year

The officers of each student organization must determine for themselves an optimal time at which the finances for the organization should be wrapped up for the year. This decision may be based on any number of factors such as the primary activity of the organization, the end of the academic year, or prior to or after the election period of new officers. The University of the South’s fiscal year is July 1–June 30.

Periodic Reporting

Officers should and must know the financial standing of the organization (income, expenses, encumbrances, etc.) at all times throughout the year in order for the organization to make accurate decisions about future events and expenses. Depending on the complexity of your student organization, the Treasurer should make no less than one formal report each semester to the other officers of the organization (and/or members, depending on the organization’s constitution). The report must be reviewed and approved by the officers. All officers should give signed approval of these reports. (Please note that officers will be held responsible whether or not these approvals are made.) The lack of attention and accountability of financial matters is viewed by the Dean of Students Office as neglect by all officers of the organization. (See below for a sample financial report.)

Budgeting

At the beginning of each fiscal year, the officers should plan the potential activities of the year and create a budget for each of these activities. This budget will then provide a general basis to determine how all funds of the organization will be used in the coming year. Be certain to document the key assumptions you have made in creating your budget, including ticket price, projected number of sales, etc.

The document should include:

  • Last year’s actual expenses and income.

  • The present year’s budget (projected expenses and expected income).

  • The present year’s actual year-to-date-total expenses and income.

  • The variance between budgeted and actual expenses and income.

A detailed budget must be submitted to the Student Activities Coordinator once a year as a requirement of re-registration.

Collecting Income

Cash receipts include all revenue collected by your organization including cash, checks, wires and Paypal transactions. Whenever possible, it is important that actual cash not be used by your organization—using cash for transactions prevents accountability of officers and is difficult to track and document. Your organization should request that income to your organization be in the form of a check or cashier's check, made payable to your organization. All revenue must be deposited in the organization’s University account and recorded immediately upon receipt. Checks should be deposited frequently (at least weekly or as cash accumulates during a collection week).

It is important for individual members selling tickets or other items to understand that they are responsible for the tickets in their possession and for the income generated by the sale of those tickets. Similarly, they are responsible for the cost of these tickets or items if they are not returned.

Treasurer’s Forms

Forms for processing financial transactions can be found at: http://www.sewanee.edu/offices/treasurer/forms/.

Paying Bills

Cash disbursement (or “accounts payable”) is the process of paying the expenses of your organization and entering those payments in your financial record. Payments or reimbursements should only be used for expenses that are for the purpose of the organization, as the organization has defined its mission in its constitution. In other words, student organizations are not permitted to use the organization’s bank accounts for individuals’ expenses.

By following some simple guidelines, your organization will be well on the way to good financial management.

DO

DON’T

  • Pay bills with checks, not cash.

  • Require two signatures to make a check valid.

  • Keep good documentation of bills received and paid.

  • Pay within the vendor’s terms and avoid interest charges.

  • Stamp or mark invoices “paid” to avoid double payments.

  • Pay for personal expenses with organizational funds.

  • Pay bills twice (always mark invoices PAID once payment is sent).

  • Pre-sign blank checks.

  • Write checks payable to cash (except in the case of petty cash).

Financial Reporting

The Organization’s treasurer must prepare a financial report at least each semester and at the end of the term of office. The financial report provides information about that period’s financial activity and a year-to-date summary. One copy should be submitted with the student organization’s fall re-registration with the Dean of Students Office. The financial report should include the following:

  • Balance sheet as of the end of the previous month.

  • Statement of income and expenses for the entire fiscal year or fiscal year-to-date.

  • Comparison of budget and actual income and expenses.

  • Explanation of significant variances from budget.

Transition of Officer, Namely Treasurers

The outgoing Treasurer should complete the following checklist prior to leaving office:

  • File all financial records for the past year (receipts, monthly statements, etc.). Student organization records should be kept a minimum of five years.

  • Complete the financial report.

  • Review the financial report with the new Treasurer; submit one copy to the Office of Student Life upon annual re-registration. Discrepancies and resulting actions should be documented in writing.

  • Reconcile all debts or have a written plan on file describing how any debts will be settled in the future.

  • Change co-signers on the organization’s bank accounts at Harvard University Employees Credit Union.

  • Deliver all bank statements, checkbooks, and other financial information to the new Treasurer.

One of the most important ways of supporting an organization is through the maintenance of good financial records. Clear financial records and procedures help to ensure that the funds are used in accordance with the goals of the organization and ensure that officers of your organization prioritize the activities for the year. The documents can also act as historical records, providing information on which past events were successful, which vendors had the best prices, and when activities took place.